Greens to mandate carbon risk reporting for large companies

Greens climate change and energy spokesperson Adam Bandt MP and Greens treasury spokesperson Senator Peter Whish-Wilson today launched a new Greens policy to introduce mandatory carbon risk reporting for Australia’s biggest companies, and to make directors responsible for managing carbon risk. Mr Bandt said that corporate sector is paralysed because of the perceived risks of ‘moving first’, which means the government has to step in to implement a regulatory framework that will force the corporate sector to act.

“Smart companies know that the dangers of climate change are clear and present. Smart investors are asking tough questions about exposure to carbon risk. And financial regulators are waving the red flag,” said Mr Bandt.

“When APRA and the Reserve Bank urge us to take climate risk seriously but companies ignore their warnings, it’s time for government to act.

“Australian companies are either not reporting on climate risk or not doing it very well.

“This is not good enough. Corporate Australia needs to fess up and explain just how prepared they are for a low emissions future.

“There is a need for government to step in, to set the standards, and to defuse any concerns about any ‘first-mover disadvantage’.

“The Greens would task the Council of Financial Regulators with developing carbon risk reporting standards consistent with the Financial Stability Board taskforce’s recommendations.

“The Greens would make reporting against these standards voluntary in 2020-21, and mandatory from 2021-22 onwards, for ASX300 companies, heavily exposed companies, large private companies, super funds, banks, insurers and multinationals operating in Australia.

“The Greens also believe that managing carbon risk is part of a director’s duty.

“The Greens would make explicit in legislation that directors of listed companies and large proprietary companies must take into account and disclose carbon risk.

Greens treasury spokesperson Senator Peter Whish-Wilson said without proper carbon risk disclosure requirements, the risk to the Australian economy from climate change is difficult to measure.

“The 2017 senate committee inquiry that I initiated heard consistent evidence that government needs to direct the corporate sector,” said Senator Whish-Wilson.

“The government also needs to better inform the public of the entire nation’s exposure to carbon risk,”

“The Greens would require that reporting against these new standards be included within the Statements of Risks in the Federal Budget to provide a tally of the risk borne by the public sector and the private sector across the entire economy.”